Page 45 - Business Principles and Management

Unit 1

FIGURE 2-2 Trends in the Labor Force (November each year)

(Millions of People)

150
Employed

120

90

60

30

Unemployed
0
1970 1980 1990 2000 2003 2005

Source: Bureau of Labor Statistics

size of the American labor force was almost 140 million. Figure 2-2 shows the
growth of the labor force.
The labor participation rate is the percentage of the labor force that is either
employed or actively seeking employment. In the last three decades, the labor
participation rate increased primarily because many more women took jobs out-
side the home. In 1975, around 46 percent of women worked outside the home.
By 2005, the figure had risen to nearly 60 percent. Some reasons for the increase
are that women have been choosing not to marry, to delay marriage, or to marry
and pursue careers before or while raising children. Figure 2-3 shows the trend in
the labor participation rates for males and females. The expansion of the economy
through much of the 1990s coaxed many people, such as retirees, people with dis-
abilities, and homemakers, to enter the labor force.
The growth of the economy, changes in the population and where people live,
and technological advances have created a variety of new jobs. One of the great
strengths of the American economy has been its ability to create new jobs. Most
new jobs are in the service industries, such as computer programming, banking
and insurance, leisure, food services, and health care. The growing use of com-
puters has created a large number of technical jobs in areas such as computer
applications and programming. The Internet has influenced how firms conduct
business, and e-commerce is rapidly emerging as a new way to sell and buy goods
and services. The rapid growth in the computer industry has led to a shortage of
qualified workers and, in turn, has led to high wages for those with the necessary
education and skills. To meet the demand for such high-tech workers, the govern-
ment allows firms to hire workers from foreign countries.
Many of the new jobs require more skills, which means workers have to
be educated. As a result, more people are going to college or acquiring training

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